Psychopathy Among Managers: The Dark Side of Corporate Leadership

Imagine a charismatic, confident manager who easily wins over both superiors and new clients. Energetic, full of ideas, and ambitious, they make bold decisions and are not afraid of risk. Is this the ideal modern leader? Or something much more unsettling? Increasing research suggests that there is a disturbingly high percentage of individuals exhibiting psychopathic traits at higher management levels. This article explores the phenomenon of psychopathy among managers, its manifestations, its consequences for organizations, and ways to deal with this problem.

Psychopathy in the Workplace – Definition and Frequency

Psychopathy is a personality disorder characterized by a lack of empathy and guilt, shallow emotions, egocentrism, and a tendency to manipulate. While psychopathy occurs in about 1% of the general population, its frequency is significantly higher in the business environment. Robert Hare, a recognized researcher on psychopathy, suggests that psychopathic individuals make up about 3-4% of the U.S. workforce, and most of them are in senior management or on their way there.

A study conducted among senior Australian managers showed that 5.76% of them could be classified as psychopaths, and another 10.42% as dysfunctional with psychopathic traits. Even more alarming data comes from a study by Bond University, which found that as much as 21% of managers exhibit clinically significant psychopathic traits, meaning nearly one in five bosses could be a psychopath.

Gardiner Morse, writing for the Harvard Business Review, explains that we are not talking about a “psychopathic” boss in the popular sense of the word or a movie-style killer. We’re referring to the 1% of the population who are clinically psychopathic. These are individuals who are “devious, manipulative, untrustworthy, unethical, parasitic, and utterly ruthless.”

Characteristics of a Psychopathic Manager

Psychopathic managers often seem like ideal leaders – they are intelligent, eloquent, confident, and charismatic. They can quickly assess what people want to hear and then create narratives that meet those expectations. However, beneath this attractive exterior lies a dark set of traits:

1. Lack of empathy and guilt – they feel no remorse for their actions, even when they harm others.
2. Superficial charm and manipulation – they can be anything to anyone, changing their personality based on the situation and needs.
3. Egocentrism and an exaggerated sense of self-worth – they have an inflated view of their abilities and significance.
4. Impulsiveness and irresponsibility – they make risky decisions without analyzing the consequences.
5. Ability to lie and deceive – they will do whatever it takes to achieve their goals, disregarding ethics or legality.
6. Shallow emotions – they do not feel deep emotional connections with others.
7. Tendency to blame others – they never take responsibility for mistakes or shortcomings.

Interestingly, many of these traits – in a more moderate form – are perceived as desirable in business leaders. Confidence, charisma, decisiveness, and the ability to make tough decisions without emotional involvement are qualities that can lead to success in business.

Impact of Psychopathic Managers on Organizations

The presence of psychopathy in the workplace, especially among management, can cause enormous damage. Psychopathic managers create a ripple effect throughout the organization, setting the tone for the entire corporate culture.

According to a 2017 study from the UK, companies with leaders exhibiting “psychopathic traits” destroy shareholder value and tend to have worse future returns on equity. Craig Boddy suggests that corporate psychopaths played a key role in triggering the global financial crisis of 2007-2008 due to greed and stinginess.

The negative consequences of having psychopathic managers in an organization include:

• Increased levels of bullying and internal conflicts.
• Higher stress levels among employees.
• Increased employee turnover and absenteeism.
• Decreased productivity and engagement.
• Worsened ethical standards across the organization.
• Counterproductive workplace behaviors, including sabotage, theft, and other retaliatory actions by employees.

Why Do Psychopaths Reach High Positions?

Paradoxically, psychopathic traits can provide an advantage on the way to the top of the corporate ladder. Several factors explain why psychopaths often end up in high managerial positions:

1. Attractiveness of leadership traits – psychopaths often possess qualities that are widely desired in leaders: confidence, decisiveness, charisma.
2. The business environment favors psychopaths – as Robert Hare states, psychopaths are drawn to the “pace and volatility of today’s hyper-competitive workplaces.”
3. Ability to manipulate and influence – they can make a good first impression and win over decision-makers.
4. Ability to make tough decisions – their lack of emotional involvement allows them to make decisions that others may hesitate to make.
5. Stress resistance – psychopaths remain calm in stressful situations, which may be mistakenly interpreted as composure and mental resilience.

Unexpected Connections: Psychopathy and Innovation

Although the impact of psychopathic managers is generally negative, some studies suggest certain unexpected benefits. An intriguing study published in the International Journal of Innovation Management showed that innovation is not negatively correlated with the presence of psychopathic managers, but rather there is a significant positive correlation.

This effect is strongest in the case of product innovation, followed by administrative innovation. Although employees under the leadership of psychopathic managers have less autonomy in carrying out their duties, their creativity does not diminish. Researchers suggest that the extreme environment, stress, and high pressure created by psychopathic managers may paradoxically push employees toward innovation.

Practical Examples of Managerial Psychopathy

Example 1: Destructive CEO

Fred “the Shred” Goodwin, former CEO of Royal Bank of Scotland, is often cited as an example of a manager with psychopathic traits. At the time of his downfall in 2008, Royal Bank of Scotland was the fifth largest bank in the world by market capitalization. Goodwin was known for taking excessive risks and showed no concern for his mismanagement, which led to the bank’s collapse. His attitude toward colleagues was unpredictable, he lived a luxurious lifestyle while creating a culture of fear within the organization.

Example 2: Public Degradation

In one international corporation, the following situation occurred: a team leader was conducting a full-day workshop with a group of managers from across the organization. The workshop was going well, and all participants were engaged, and the work was progressing according to plan. After the lunch break, a senior manager unexpectedly entered the room, stood in front of the group, and said, “This is not going well at all; I will take over now.” This might seem like a minor incident, but it was part of a broader pattern of undermining authority, publicly and privately belittling the work of subordinates, which is characteristic of a psychopathic management style.

Example 3: Manipulative Manager

In the marketing department of a large pharmaceutical company, there was a manager known for his exceptional charisma and confidence. He could charm the board with his presentations and ideas. However, he regularly took credit for his subordinates’ ideas, set unrealistic goals, and then blamed the team for failures. He systematically divided employees by giving them conflicting information and creating an atmosphere of competition rather than collaboration. When one employee filed a complaint with HR, the manager initiated a disinformation campaign, portraying the complainant as incompetent and problematic, which ultimately led to their dismissal. Despite a high turnover rate in the team (over 70% in a year), the manager maintained his position and was even promoted due to his ability to present problems as successes in discussions with senior management.

How to Deal with a Psychopathic Boss?

For employees under the leadership of a psychopathic manager, the situation can be extremely difficult and stressful. Here are a few strategies for coping:

1. Document everything – write down the facts that objectively reflect the psychopathic behaviors, along with the date and time. These neutral facts can help report the issue to HR or the psychopathic manager’s supervisor.
2. Avoid one-on-one confrontations – psychopaths often manipulate during private meetings. Try to ensure that important discussions have witnesses present.
3. Build a support network – maintain good relationships with colleagues and other managers who can corroborate your experiences and provide support.
4. Stay professional – don’t get caught up in psychological games and manipulation. Focus on the facts and tasks at hand.
5. Consider changing jobs – if the situation becomes unbearable and negatively affects your mental health, seeking a new job may be the best solution.

For organizations, it is crucial to implement procedures that can help identify and deal with psychopathic managers:

1. Improved recruitment processes – include personality trait and interpersonal skills assessments in the selection process for managerial positions.
2. Regular 360-degree evaluations – gathering feedback from superiors, colleagues, and subordinates can help identify problematic behavioral patterns.
3. Training on ethics and corporate culture – regularly reminding about the organization’s values and expected behavioral standards.
4. Strong whistleblowing mechanisms – creating safe channels for reporting abuse and unethical behavior.

Summary

Psychopathy among managers represents a serious challenge for modern organizations. Paradoxically, traits that may lead to individual success in business – decisiveness, confidence, stress resilience – in their extreme form can lead to destructive behaviors typical of psychopathy.

Studies indicate that the percentage of psychopaths in managerial positions is significantly higher than in the general population, which should prompt organizations to implement appropriate identification and mitigation mechanisms for the negative effects of psychopathic leadership.

Although some studies suggest certain benefits associated with psychopathic managers, such as increased innovation, these do not outweigh the long-term harm they can cause to the organization and its employees. Awareness of the problem, proper recruitment procedures, and control mechanisms are crucial to minimize the risks associated with workplace psychopathy.

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